Despite the strong second wave of COVID-19 infections in Europe and North America, China’s economy is growing strongly again.

China, the world’s second-largest economy, was recovering at an impressive pace in the third quarter of this year, and its GDP had increased by 4.9% above year-earlier levels.

The positive economic growth which was posted over the last six months helped China's economy recover all of the output it lost after its historically bad first quarter.

In view of China’s pandemic induced economic downturn earlier in the year, the latest figures brought its GDP growth over the first three quarters of 2020 to 0.7%.

Oxford Economics predicts China’s GDP will grow 2% for the full year.

Most economists expect China’s recovery to continue on at a moderate pace, with household consumption picking up in the fourth quarter and becoming a more important driver in the first half of 2021.

Of course, this kind of moderate growth is a far cry from the 6% growth target China forecast before the pandemic began. Nonetheless, according to the IMF, a 2% expansion would still leave China as the only major economy to see positive growth this year.

In other words, as much of the world continues to struggle with the virus, China's recovery has been relatively speedy.

This is because China enforced a stringent lockdown earlier in the year and its population tracking policies intended to contain the virus was massive and quite effective. China’s government also advanced huge sums of funds for infrastructure projects to support its economy during its weak phase. 

There are also signs that China’s expansion is finally broadening into consumption after the government’s earlier phase which stressed an industrial recovery. Retail sales rose 3.3% YoY as of September, while industrial production rose 6.9%, the biggest gain in 2020.

As Trading Economics recently observed, “rising global demand for medical equipment and work-from-home technology has been boosting exports while government support including more fiscal spending, tax relief and cuts in lending rates and banks' reserve requirements has also helped to boost the recovery.”

China’s Real GDP Growth, Year Over Year

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China’s exports to the US and its trade surplus are at record highs.

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